G4S share price: vastly underperforms as news of contract loss breaks

Share this article!

G4S (GFS:LON) shares were down -1.1 (-0.44%) to 251.30p this morning (10.44 BST) in the wake of the news that the MoJ has stepped in to seize control of HMP Birmingham from the private security firm after consistent reports about poor conditions and management.

This is in contrast to a more buoyant afternoon for the FTSE which is standing at 7593.12p, up 0.46 per cent, as of 14.37 BST. 

Poor reports

A July report showed 1,434 assault incidents over the last year and it received a ‘poor’ rating in terms of safety, respect, activity and resettlement, according to Proactive Investors.

Chief Prison Inspector Peter Clarke said that there had been a ‘dramatic deterioration’ at Birmingham Prison since its last inspection in 2017, with the report citing: “Some of the most disturbing evidence that inspectors……..have seen in any prison.”

G4S welcomes six-month step in

G4S’s MD of Custody and Detention Services has responded to the news by stating that, “The wellbeing and safety of prisoners and prison staff is our key priority and we welcome the six-month step-in and the opportunity to work with the ministry of Justice to urgently address the issues faced at the prison.” as quoted in the Guardian.

Fall in confidence

Whilst the MoJ’s intervention is not technically speaking a nationalisation, as there is no tax payer liability, it represents a collapse in confidence of the company, which has been dogged by issues around safety, conditions and management for a number of years. This could be a defining moment in its future.

As of 14:36 BST, Monday, 20 August, G4S plc share price is 231.05p.

Add Comment

Investing is speculative. When investing your capital is at risk. This site is not intended for use in jurisdictions in which the trading or investments described are prohibited and should only be used by such persons and in such ways as are legally permitted. Your investment may not qualify for investor protection in your country or state of residence, so please conduct your own due diligence. This website is free for you to use but we may receive commission from the companies we feature on this site. Click here for more information.